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The government had nearly doubled its buffer stock target to 1 lakh metric tonnes after last year’s price rise, but so far, it has only procured 45,000 MT.
Wholesale traders cite a nearly 20% increase in demand for vegetables as restaurants, dhabas, canteens and other eateries have opened since 1 June.
In September 2019, the govt banned onion exports and also imposed an MEP of $ 850 per tonne, after prices started skyrocketing due to supply-demand mismatch.
Excess monsoon destroyed the kharif onion crop, but there was much administrative failure that led to the prices crossing Rs 150 per kg.
Govt spent Rs 226 crore to import the onions, but has only sold worth Rs 17-19 crore to the states.
Onion prices had skyrocketed to Rs 100 per kg in several parts of the country last November due to a 30-40 per cent dip in its production.
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Metals and Minerals Trading Corporation has issued a tender to import 11,000 metric tonnes of onion, of which 4,000 MT was awarded to China.
Onion prices at Lasalgaon in Maharashtra are expected to plunge to about Rs 20-25 per kilogram from mid-January.
Farmers have already been roiled by the steep onion prices, currently being sold at Rs 100/kg. The govt has been working towards cooling prices, including banning exports.